Dollar smashes through ¥100 line for first time since ’09; Nikkei soars 3.1%

On the back of the greenback's surge, the benchmark Nikkei 225 stock average rose 3.09 percent, or 438.99 points, to 14,630.47 in midmorning trading, while the broader Topix index of all first section shares was up 2.26 percent, or 26.70 points, at 1,208.50.

While riling some of Japan's trading partners, the yen's prolonged rise has generally won support from leaders of other major industrialized nations eager to see the world's second-biggest economy end two decades of stagnation. Prime Minister Shinzo Abe has pushed drastic fiscal and monetary stimulus strategies to bring the country out of its long bout of deflation and boost domestic demand.

This monetary easing, and expectations it will promote inflation, have helped drive the value of the yen against the dollar down by more than 20 percent since October, when it was trading at around ¥78.

"The dollar's breach of the ¥100 level is iconic and will automatically draw more interest to Japan as a potential equity investment destination," a fund manager at a foreign asset management company told Dow Jones Newswires.

Under new Gov. Haruhiko Kuroda, the Bank of Japan has vowed to double the monetary base through purchases of government bonds to meet a 2 percent inflation goal within the next two years.

By joining the U.S. Federal Reserve and other major central banks in flooding the economy with cash, the BOJ hopes to get businesses and consumers to begin spending more and end the long deflationary malaise.

The dollar's gain followed U.S. unemployment claims data that showed the pace of layoffs fell to a seasonally adjusted 323,000 last week, the lowest level since January 2008, the Labor Department reported.

The figure has resulted in higher expectations that the Fed will begin tightening monetary policy this year instead of 2014, analysts said, boosting the greenback's prospects.

"The strong U.S. jobs data showed more proof that the American economy is on the rebound, a powerful fundamental theme that should, along with the weaker yen, keep the market bullish" in Tokyo, said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

On Wall Street, the Dow Jones industrial average slipped 0.15 percent to 15,082.62 on Thursday as buyers took a breather after a bout of successive record closes.

Source: JAPAN TIMES